The unexpected and seemingly uncoordinated start of preliminary “peace negotiations” between the U.S., Russia, (and potentially Ukraine) has fuelled speculation about the future of the controversial Nord Stream pipelines from Russia to Germany through the Baltic Sea.
Nord Stream 1 and Nord Stream 2, each consisting of two pipes, were built to pump 110 billion cubic meters of natural gas but after an act of sabotage three of the four pipes were damaged in September 2022, and one of the Nord Stream 2 pipes remains intact.
A Swiss court has extended recently the deadline for Nord Stream 2 AG to restructure its debts to May 9 and the Danish Energy Agency has granted permission to Nord Stream 2 AG to perform maintenance work “to preserve the damaged pipeline by installing customised plugs at each of the open pipe ends to prevent further gas blow-out and the introduction of oxygenated seawater.”
Meanwhile, that the German government and industry players are considering using parts of Nord Stream 2 for green hydrogen deliveries from Finland, Handelsblatt reported.
Highlighting the extraordinary level of geopolitical uncertainty, Tatiana Mitrova, a research fellow at Columbia University’s Center on Global Energy Policy, told NE Global on February 14 any discussion about the future of Nord Stream 2 is purely speculative.
Asked if there any future use for the Nord Stream 2 pipelines, and how can German investors protect their investment, Mitrova noted that currently Nord Stream 2 remains a politically and economically stranded asset. “The Swiss court’s extension of Nord Stream 2 AG’s debt restructuring deadline reflects ongoing financial uncertainty, but chances of recouping investments are limited. Legal options for German investors, such as arbitration, exist but remain uncertain. A write-down of investments is still the most probable outcome unless a viable alternative use for the infrastructure emerges,” she said.
Shareholders in Nord Stream AG, the Swiss-based operator of Nord Stream 1, are Russian gas monopoly Gazprom (51 percent), Germany’s Wintershall Dea & E.ON (15.5 percent each), Dutch Gasunie (9 percent) and France’s ENGIE (9 percent). Nord Stream 2 AG is owned by Gazprom and co-financed by the Russian gas giant and five European energy companies: Uniper, Wintershall Dea, OMV, Engie, and Royal Dutch Shell.
Chris Weafer, CEO of Macro-Advisory, the leading independent strategic business consultancy in the Eurasia region, told NE Global on February 17 that around the same time that Denmark gave permission for work to be carried out on Nord Stream 2 and the Swiss court extended the restructuring deadline, a report circulated in Germany which specifically highlighted one of the main problems facing the economy is the higher cost of energy. “This also follows the call between (German Chancellor Olaf) Scholz and (Russian President Vladimir) Putin in late November where we now know Putin offered a resumption of gas via the undamaged pipeline and at a significant discount to the cost of imported U.S. LNG (liquified natural gas),” Weafer said.
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“It seems as if there will be a resumption of gas flow between Germany and Russia as soon as the peace process starts and looks sustainable. Germany needs cheaper energy, and Russia is willing to use price discounting to regain some of that market. We have seen the Kremlin use price discounting for a whole range of materials in order to gain a foothold in markets or for political barter. Expect the same approach with Germany and other EU customers,” Weafer explained.
Russia’s invasion of Ukraine on February 24, 2022, prompted Europe to drastically cut its energy imports from Russia. Moreover, the Ukrainian government did not extend a transit agreement for the transit of Russian gas across its territory to Central Europe after it expired on January 1, 2025.
Weafer stressed, however, that there will be no return to business as usual. “Nobody, either in Europe or in Russia, expects to see a return to pre-2022 volumes. The EU wants much greater, and safer, diversification in energy supply and Moscow also wants to diversify its customer base with gas exports to Asia, Central Asia, Iran and, eventually, according to Putin’s ambition, to the Indian market,” Weafer argued. “I expect the undamaged NS pipeline, with capacity of 28 billion cubic meters per annum (Bcmpa) will be put back into operation quite quickly after a peace process is established. If, or when, a deal is done, I expect a second pipe will be restored and boost the capacity to the previous 55 bcm directly to Germany and at a discount for one to two years,” he opined.
The Macro-advisor co-founder and Eurasia expert said he does not expect the two other pipelines to carry Russian gas but these two may be used to carry hydrogen from Finland, as has been proposed. “I also expect the pipelines to be sold to a third party so that the contract for supply will not be with Gazprom but with an intermediary. The optics will be important for some time after the peace deal is agreed,” he said.
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Asked if Russian gas could once again flow through Nord Stream 2 if there is an agreement ending the war between Russia and Ukraine, Mitrova said a peace agreement would change geopolitical dynamics, but a restart of Russian gas exports via NS2 remains unlikely. “The EU has shifted away from Russian energy, increasing LNG imports and diversifying suppliers. Even if limited Russian gas exports to Europe resume, existing land-based routes (via Ukraine or Turkey) would likely be prioritized over NS2, which remains politically toxic,” the Columbia University expert said.
Repurposing NS2 to deliver green hydrogen or natural gas from Finland
Mitrova noted that discussions about repurposing parts of Nord Stream 2 for hydrogen transport exist, but this faces serious geopolitical and technical obstacles. “Technically, hydrogen transport requires modifications to pipelines due to material degradation risks. Economically, Finland would need major investment in hydrogen production and export infrastructure,” she said. “However, the biggest obstacle is Russia. Russia still legally owns NS2’s infrastructure through Gazprom’s subsidiary, Nord Stream 2 AG. It is highly unlikely that Moscow would allow Finland and Germany to unilaterally repurpose the pipeline for hydrogen – especially since this would permanently eliminate NS2 as an option for Russian gas exports,” she added.
If hydrogen transit were to become an option, Mitrova argued, Russia would likely insist on participating in the project, potentially offering Russian-produced hydrogen instead of European hydrogen. Given current EU policies, this would be politically unacceptable.
“In short, while the idea of using NS2 for hydrogen transport is being explored, Russia’s legal control over the infrastructure makes it nearly impossible without Moscow’s consent – which is unlikely to be granted,” she added.
Environmental impact of the damaged pipelines
Asked why the Danish Energy Agency is allowing the maintenance of Nord Stream 2, Mitrova said Denmark’s decision to permit NS2’s preservation is mainly driven by environmental concerns, as the pipeline still contains gas that could pose risks if leaked. According to the Danish agency, the damaged Nord Stream 2 line is estimated to contain approximately 9-10 million cubic meters of natural gas, while the intact line remains filled with gas and maintenance work is necessary to reduce environmental and safety risks stemming from the pipeline being filled with seawater and remaining gas.
Mitrova noted, however, keeping the infrastructure intact also preserves a long-term option for potential repurposing — whether for hydrogen, CO₂ storage, or, in an unlikely scenario, resumed gas transit.
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